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March 2012

Vol. 02 Issue 03

in this issue...
Safety firSt NGCP continues to develop safety mechanisms to protect its workforce and physical assets.
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Spotlight:

CHairMaN DU ZHiGaNG

CUStOMer iN fOCUS LEYECO II General Manager Atty. Jerry Gwen L. Conde, CPA, discusses power service improvements in Leyte.
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PartNerSHiP WitH HOSt COMMUNity NGCP donates computers to boost a newly established computer learning facility in Vista Alegre, Bacolod City.
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iNDUStry NeWS ERC directs DUs to complete time-of-use meter installation page 08 > StraiGHt frOM tHe DOe DOE calls on DUs to ensure adequacy of contracted power supply in Mindanao
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PaGe CONVerSatiONS rep. Henedina r. abad

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The man who sits behind the Chairman’s desk of the National Grid Corporation of the Philippines (NGCP) undoubtedly knows his business – with his strong determination to succeed backed by decades of experience from various power companies in China and a Ph.D. on Power System and Automation from Shandong University. Chairman Du Zhigang – who also sits as Vice President of the State Grid Corporation of China (SGCC) – shares that the secret to a successful career should be one’s unending thirst for learning and the willingness to put in unremitting efforts to succeed. “As a Senior Officer, I remind myself to adapt to globalization, and continuously learn new technologies and advance my management experience. “One needs to be unassuming and discreet,” he adds. “We need to learn management philosophies and methodologies from our partners at all times. One also needs to have a broad mind and a lofty vision.” At the same time, he says it is important to uphold the principle of integrity and believe in mutual trust and mutual benefits through opportunity to boost the power grid technology communication and coordination. “We extend exchanges and make full use of our expertise in our sincerity and share our mature experience the power transmission area, as well as to help with our partners.” enhance the Chinese-Filipino friendship, is very As one of the pillars of NGCP, he notes important and is of historical significance.” that his goal is to make more contributions He points out that the partnership has to the development of the transmission grid yielded good results for NGCP. “For the worldwide – by learning everything he can past three years, NGCP’s performance is about the Philippine power remarkable and the sector while absorbing the power grid operation “Equipped with the best outstanding management is stable. The quality practices and theories and and reliability of power philosophies of power utilities in other countries. supply has improved. working together with our “Equipped with the best “In future, we Filipino partners, we can better wouldlikethecontinuously practices and theories to and working together with push forward the development work closely with our our Filipino partners, we Filipino partners and of NGCP.” can better push forward NGCP employees the development of NGCP.” to further contribute to the development of Philippines transmission network, the Joining the Philippine market economy and the friendship between the two Mr. Du says SGCC – through its countries.” partnership in NGCP – saw the franchise to In recent years, as the largest utility in the operate the Philippine transmission grid as a world, SGCC is not only a leading player in great opportunity for the company. global power network construction, operation, “The Philippines is a close neighbor management, state-of-art technology research to China. We have extensive and intensive and development, but is also internationally exchanges in history,” he adds. “For SGCC, an page 05 >

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Safety First

NGCP consultant inducted to top IIEE post

Engr. Jules S. Alcantara

“It is better to lose one minute in your life than to lose your life in a minute.” This summarizes the relevance of safety in our daily lives – especially at work where we spend most of our waking hours. Statistics show that a number of accidents – at times fatal – do happen in the workplace, especially when employees become too complacent and fail to recognize the importance of safety. Safety is especially relevant for the National Grid Corporation of the Philippines (NGCP), given the potential dangers its facilities can pose not only to its employees but also to host communities. “Safety in the workplaces is the main focus of NGCP. We want to ensure the continuing development of the mechanisms to address most primarily the protection of our workforce,” says Mr. Ernesto S. Villaroman, head of NGCP’s Safety Management Division (SMD), Quality & Safety Management Department. “The importance of safety in any organization doing business in the Philippines is two-tiered. First, this is in compliance to the Labor Code that specifically emphasized the requirement for organizations to address the protection of its employees. Second, this shows the commitment of an organization to ensure the safety of its workforce at all times.” Setting up guidelines According to Mr. Villaroman, NGCP’s best safety practices are based on its experiences and the lessons learned from the recorded incidents which have been translated into safety guidelines, procedures, advisories, and policies that all the concerned functional groups are mandated to implement for strict compliance.

These include safety tagging system, pre-maintenance/toolbox meetings prior to hazardous activities, and O&M-related procedures. NGCP’s Integrated Typhoon Action Plan (ITAP) was expanded into an Integrated Disaster Action Plan (IDAP) to include guidelines and procedures in preparing and coping not just with typhoons, but also other events which may cause grid disturbances, such as tropical depressions, storms, heavy rains, flash floods, earthquakes, volcanic eruptions, and tsunami. The plan covers preparations such as posting of line crews in strategic pre-selected locations to speed up actual deployment, inspection and evaluation of damaged facilities; postponement of all scheduled transmission line and substation maintenance shutdowns in the affected areas until such time that the situation has stabilized; and the provision of back-up telecommunication facilities, equipment, vehicles, line materials and hardware necessary for the immediate repair of transmission facilities. In most cases, temporary power transmission tower structures called Emergency Restoration Systems (ERS) are erected in severely affected areas to create a bypass line and immediately restore power. To speed up the energization of crucial lines, some lines are reconfigured to allow the transfer of power load to other undamaged components of the system. Thorough preparation One overall and four regional disaster management command centers are also tasked to oversee and coordinate all restoration
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National Grid Corporation of the Philippines (NGCP) consultant Jules S. Alcantara led the group of newly-elected officers of the Institute of Integrated Electrical Engineers of the Philippines, Inc. (IIEE) who were inducted in Kalibo, Aklan early this year. Joining Engr. Alcantara in the roster of IIEE officers is NGCP colleague Gregorio R. Cayetano who is a Principal Engineer at the Reliability Division, Reliability and Technical Assessment Department of NGCP. IIEE is the sole accredited organization of professional and registered electrical engineers and registered master electricians in the Philippines. The new set of IIEE officers are: National Officers National President: Jules S. Alcantara Vice President for Internal Affairs: Gregorio R. Cayetano Vice President for External Affairs: Alex C. Cabugao Vice President for Technical Affairs: Ma. Sheila C. Cabaraban National Secretary: Larry C. Cruz National Treasurer: Florigo C. Varona National Auditor: Angel V. De Vera, Jr. Regional Governors Governor-Northern Luzon: Efren Nelson F. Plete Governor-Central Luzon: Virgilio S. Luzares Governor-Metro Manila: Eusebio A. Gonzales* Governor-Southern Luzon: Jozanne F. Jalbuena Governor-Bicol: Edwin G. Parañal Governor-Western Visayas: Cirilo C. Calibjo Governor-Eastern/Central Visayas: Federico C. Mercado Governor-Northern Mindanao: Remegio B. Gonzales Governor-Southern Mindanao: Benjamin A. Arboso Governor-Western Mindanao: Richard O. Lizardo* EDITORIAL TEAM Anthony L. Almeda Cynthia P. Alabanza Jennifer M. de Jesus Charles S. Dino Adrienne B. Mendoza Melchor F. Abubo Kimberly C. Realoza Joella D. Perez Supported by: Tagline Communications Consultancy http://taglinecommunications.com/

*ad interim appointee

is a publication of the CorpComm and Public Affairs Division. What do you think of our new newsletter? send your comments via: SMS: +63917.587.4109 Fax: +632.922.2684 e-Mail: corpcomm@ngcp.ph

TRANSMISSIONS

NGCP

NATIONAL GRID CORPORATION OF THE PHILIPPINES

Corrective Measures

Ten years since the passage of a landmark law that sought to reform the Philippine power sector, the same problems that necessitated the restructuring continue to persist. This reality has prompted calls to amend – and, in some sectors, even repeal – the Electric Power Industry Reform Act (EPIRA). Charged with the task of overseeing EPIRA’s implementation, the Joint Congressional Power Commission (JCPC) finds itself in the middle of the debate on the effectiveness of the government’s decision to adopt privatization as a solution to the country’s power woes a decade ago. Rep. Henedina R. Abad, co-chair of the JCPC, shares her views on where the problems lie and what the government can still do to bring the country closer to the goals set by the EPIRA. How do you assess the impact of EPIRA on the power sector? The very intent of EPIRA is to be able to address the problems that we were facing 10 years ago, that have been there for a long time, basically energy security, affordability, and price in the sense that when you talk about security, you talk about efficiency of the sector. So this restructuring has been borne by of those intentions. But then, 10 years after, we still face the same problems. So the immediate impulse, of course, is to amend the law. Part of the work of JCPC as an oversight body is to be able to review the implementation of the law because the question here is: “Are the problems we are facing now part of the transition? Should these things be seen as part of transition?” If you’re changing something in the transition period, there will be difficulties. Therefore, we need to put up safety nets, so to speak, to lessen the burden of transition. The second question is, as Cong. (Arnulfo) Fuentebella and Sen. (Sergio) Osmeña would always say when we talk about problems of EPIRA or problems in the sector: “Are these problems caused by EPIRA?” The response would be, there is nothing wrong with the law but it is the implementation. Again, as an oversight we need to study and review and analyze the implementation. So are you disinclined to amend? I am not making any conclusion. For me, it is important that we recognize the problem. We cannot say that those problems do not exist, they do. We are still burdened by the same debt, lack of energy security or stability of supply. We have to recognize those problems… Kailangan mapagaralan natin, nagiging problema ito, and this is part of oversight, part of the work of JCPC. After recognizing those problems, we would have to ask again: “Is there something wrong with the implementation that we need to correct? Can the solutions be (covered by) executive options?” You don’t always need to amend the law, (certain issues) can be addressed through executive action. But when you say EPIRA needs an amendment, you cannot simply say that because you need to study and you need to analyze the implementation. So I think this is the top priority of JCPC. We need to review the implementation of the law; every law needs to be reviewed after a period of time. The right way of addressing this is really trying to balance the realities of the industry, the realities where we are now in terms of the industry, the need to attract companies to invest here, and at the same time the needs of the consumer. Are we working on a specific timeline for this review and assessment? For me – this is just personal – we should at least have a solid assessment before we end this term. Part of the assessment is to
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CONVerSatiONS

rep. Henedina r. abad

A career in public service spanning 31 years of development work focused on building and strengthening human and institutional capacities in civil society and the public sector A firm and proven dedication to the promotion of accountability, transparency and integrity among public leaders and institutions through public sector reform, leadership development and citizen empowerment A leader recognized for her significant contributions in capacity building and institutional development for the implementation of key reform programs such as decentralization, local service delivery, anti-poverty and anticorruption programs A mentor recognized for her practical understanding of politics and public policy enriched by a unique combination of knowledge, skills and linkages from local and international work with civil society, electoral politics and academe EDUCATION AND TRAINING Masters in Public Administration John F. Kennedy School of Government, Harvard University Cambridge, MA, 1995 Bachelor of Arts, Major in Economics, cum laude Maryknoll College, Katipunan, Quezon City, 1976 Trained with the John F. Kennedy School of Government, Harvard University on Leadership in Managing Political, Economic and Social Transitions (1995); Attended Certificate Program of International Personnel Management Association on Human Resource Competency Model (1999) and completed the program on Strategic Management of International NGOs of the Manitoba Institute of Management in Winnipeg (1993) PROFESSIONAL EXPERIENCE • Representative - Lone District of Batanes House of Representatives, Philippine Congress (2010-2013) • Chairperson of the Committee on Energy - House of Representatives and Co-Chairperson of the Joint Congressional Power Commission; Vice Chairperson of the Committee on Good Government • Program Manager - National Budget Monitoring, International Center for Innovation, Transformation and Excellence in Governance (2008-2009) • Representative, Lone District of Batanes House of Representatives, Philippine Congress (2004-2007) • Founding Dean - Ateneo School of Government, Ateneo de Manila University (1996-2003) • Teaching Fellow - Kennedy School of Government, Harvard University (1994-1995) • Executive Director - Philippine-Canadian Joint Committee for Human Resource Development (1989-1993) Experience working in Government: • Member, Board of Directors, Career Executive Service Board (2002-2003) • Member, Board of Trustees, Local Government Academy (2002-2003) • Commissioner, National Commission on the Role of Filipino Women (1988-1989)

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CUSTOMER IN FOCUS:
Franchise Area President General Manager Address Hotline Numbers Telephone Nos. Email : : : : : : :

LEYTE II ELECTRIC COOPERATIVE, INC. (LEYECO II)
Tacloban City, Palo and Babatngon towns in Leyte Mr. Rolando G. Hidalgo Atty. Jerry Gwen L. Conde, CPA Real Street, Sagkahan District, Tacloban City 053-325-7199, 0917-304-4316 053-321-1493 (OGM), 053-321-2629 leyeco2@hotmail.com become one of the country’s best-performing distribution utility cooperatives. From being a Category D electric cooperative in 1994, LEYECO II transformed into a Category A+ cooperative in 1997 – a position that it has maintained to date. LEYECO II boasts of an average system loss of just 9.85% and having one of the lowest distribution tariffs nationwide
Atty. Jerry Gwen L. Conde, CPA LEYECO II General Manager

LEYECO II was incorporated and registered with the National Electrification Administration on October 26, 1975 to serve Tacloban City and the municipalities of Palo and Babatngon in Leyte. As of December 2011, LEYECO II serves a total of 60,137 households in its five districts. The electric cooperative has gained acclaim for its dramatic turnaround to

at P1.1866 per kWh in 2011 – pegging its effective rate for residential customers at P7.3421 per kWh. In this interview, General Manager Atty. Jerry Gwen L. Conde, CPA talks about LEYECO II’s operations and the improvements that have been made to provide better services to power consumers.

1. What are the best practices in running your business? We have set up our Multi-Sectoral Electrification Advisory Council (MSEAC) that meets quarterly, where district reports are presented and planning workshops are conducted to outline activities per district, in connection to their functions as LEYECO II’s sectoral representatives. MSEAC also acts as a partner/facilitator in the Harampang Barangay program, in coordination with the Board of Director per district and LEYECO II personnel, and gathers information from the head office and disseminates the information to the respective sectors. We also have a System Loss Reduction Program that implements our cluster metering to improve our meter reading. The program also aims to prevent pilferage by using different kinds of meter seals, such as cable, sticker and new generation meter seals. To maintain our collection efficiency, we hold a Quarterly Pa-Premyo Raffle Draw where we reward prompt payers from each of our three areas. We maintain a collection schedule that is open seven days a week and a special banking arrangement scheme. We are also implementing a pre-paid metering scheme. To improve the competence of our employees, we conduct Lakbay-Aral to other electric cooperatives as well as character-building activities such as values formation. We also hold a monthly dialogue between employees and management. As part of our social activities that aim to enforce bonding among our employees, we celebrate monthly birthday bashes together, and conduct team building sessions and an annual sports activity which we call the LEYECO2LYMPICS. We have our own basketball team, a dance group and a chorale. 2. How do you manage customer complaints? We have established a 24-hour consumers’ welfare assistance system that handles customer concerns. We also have a spacious and convenient consumers’ area for collection, complaints and new connection matters. We also maintain regular coordination with our big load customers to address their concerns. Aside from the distribution of our monthly news leaflets, we also use tri-media in our information dissemination efforts to properly inform our customers of the various issues.

3. What are your medium and long-term expansion/ improvement plans? We are planning the expansion of Campetic Substation with the installation of additional 1-unit 20/25 MVA, 69/13.2 KV, 3 phase Power Transformer with complete accessories by 2013. As part of our Distribution Line Safety Development, we will also be installing Line Reclosers at Midstream for line safety, protection and reliability of all nine Feeders being served by our three substations. We are also looking at some secondary power quality improvement within the coop’s franchise area by uprating overloaded distribution transformer units to accommodate the demand being served. There are likewise plans for the installation of new primary and secondary lines to serve the growing number of customers in the coverage area, especially in Tacloban and Palo, due to the proposed residential housing projects, subdivisions and other business-related developments in the area. We are also working on the extension of lines to sitios within the coverage area, particularly those with a potential of at least 12 households for connection to the system. Along with these projects, we are doing rehabilitation and replacement of primary and secondary wood poles with concrete or steel poles within the coverage area. 4. Now run by a private corporation, what are the improvements you’ve noticed in the transmission sector? What are the areas that still need improvement? We have noticed that voltage fluctuation/flickering has already been corrected and that the problems of over- and under-voltage delivery have likewise been addressed. Unscheduled power interruptions have also been minimized, and the Power Quality & Reliability levels have improved to 95%. 5. What is your message for NGCP as a partner in delivering reliable and affordable power to the Filipino people? NGCP has consistently delivered excellent services to the distribution utilities. This partnership has tremendously benefited the Filipino people in terms of secure, reliable, and affordable quality power delivery. NGCP’s officers and personnel have, many times in the past, proven themselves worthy of the people’s trust and confidence.

NATIONAL GRID CORPORATION OF THE PHILIPPINES
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recognized for its pioneering experience in the field of ultra-high-voltage transmission, smart grid technology. “SGCC pays much attention to global energy cooperation and is fully involved in the cooperation among international power utilities,” Mr. Du explains. “We always look forward to the exchanges and cooperation with fellow power utilities from all countries and are willing to share our experience and development results.” NGCP’s strategies for success The Chairman has high expectations for NGCP, having posed significant achievements in terms of improving the capacity and performance of the local transmission system as well as in operational processes within the organization itself. “NGCP has outstanding development strategies,” he notes. “We have clear-cut vision and mission: to be a first-class power utility in Southeast Asia. To achieve this goal, we are also ready with a plausible long term plan and an implementation plan.” In addition, he says NGCP is a united entity. “The Board, the Management and the implementation team work closely together. Our Filipino and Chinese staff have joined their efforts towards the same goal. The smooth and improved operations could also be attributed to their mutual respect and understanding.” At the same time, NGCP has undertaken various measures taken to improve management, where decision makers and management strictly follow the rules and regulations of the company, and advanced management philosophy has been introduced. “NGCP is at a critical stage of development. The 3rd Regulatory Period is the first complete regulatory period for NGCP to lay a sound foundation,” Mr. Du says. “Judging from the history of power utilities all over the world, a solid foundation is very important for a company’s future growth. Now NGCP shall put in its effort to improve its foundation in terms of facilities, staff skills and management.” Transmission development plan The Chairman shares that NGCP’s mid/ longer-term goal is to build a strong and smart power grid, noting that transmission grid is a crucial link in a power sector. “The reliability of the power grid has an implication on the overall development of the power sector,” he says. “The smartness of the power grid is also an important indicator for the economy growth efficiency. A strong and smart national transmission network is a very important precondition for the growth of NGCP, the Philippine power sector and national economy.” NGCP has already established a complete transmission development plan. It has a 2030 transmission master plan and a 2011 transmission development plan which lay out the direction and the specific implementations of the transmission development. These

include: the 230KV and 500KV Metro Manila Transmission Looping Project; the North Luzon – 230KV Looping Project which will facilitate RE integration; and the Inter Connection Projects – which will prioritize the Leyte-Mindanao Interconnection Project and Luzon-Mindoro Interconnection Project. “When it comes to power transmission, based on our observation, we believe certain amendments and specifications to the Grid Code are necessary, such as clear regulations on transmission planning, ancillary services and RE integration,” Mr. Du says. He adds that for the power sector’s development as a whole, regulatory and legislative entities may want to pay more attention to the coordination and the planning interfaces between the transmission and distribution, and between the generation and the transmission. “In this way, the power sector will adapt itself to the demand of the Philippine economy – and a coordinated development of the whole power sector can also be achieved.” Addressing the competition With the renewed interest of the private sector in the Philippine power industry, Mr. Du believes that the private sector’s increased participation would help the sector to advance to “fairness, openness and transparency.” “It will also play a positive role in creating more jobs and enhancing the economic growth of the country,” he said. “Of course, while encouraging the private sector to invest in the power industry, the overall planning and demand forecast should not be overlooked. We’re looking forward to more competition and more precision on power demand forecast.” “NGCP’s long term perspective is in compliance with the vision and mission of the company – to make NGCP a first-class power transmission utility in Southeast Asia,” Mr. Du says. As a private power utility, NGCP strictly complies with the regulatory regulations, and is working hard to satisfy the requirements of the Philippine government and the public. “(We) pay attention to people’s expectations for the power sector to grow and evolve. To keep up with people’s expectations and our commitments, NGCP shall retain its growth vitality, continuously improve ourselves to be socially responsible and provide quality services,” the Chairman says. At the same time, he points out that NGCP will continuously absorb the best practices from leading utilities all over the world to further optimize the management process and to streamline its procedures to make its mechanism “more efficient and dynamic.” In fact, he points out that from his perspective, he sees the Philippine transmission network in the year 2030 to be among the level of those of developed countries – and in some areas could be even more advanced. Hard work and diligence With his plate full juggling two other positions – as Director General of the

Department of International Cooperation and as Chairman of State Grid International Development Limited, Chairman Du keeps a very tight daily routine. “Every day, I work more than 10 hours, and at times need to work during weekends and holidays.” Overseas business trip is also common. “As a matter of fact, recently, I spent almost twice the time overseas than in the office,” he says. In his daily work, he pays attention to NGCP’s operation and discusses the plans and strategies of the company with its senior officers. Having a hectic work schedule leaves limited time for family. “The success of my career is not possible without their understanding and support,” he points out. “Hard work and diligence are traditional values of Chinese people. The fruition of my endeavor is also the best reward for my family.”

Smart Grid is one of the biggest trends in the transmission today in many parts of the world. How is NGCP doing in terms of making a transition to this s ystem, and what can we learn from SGCC’s experience in adopting and utilizing this new technology? Starting from the takeover of Transco, NCGP has done effective work in building a stronger smart power grid. In February 2011, NGCP and SGCC signed a framework agreement of strategic cooperation of Smart Grid technology. Since then, NGCP sent several Smart Grid delegations to visit SGCC for technology exchange. Now, NGCP is going to use advanced and comprehensive SCADA system for System Operation and adopt MPSC System in the upgrading of substations. We have also started the feasibility study of the first Smart Substation in the Philippines. SGCC proactively carried out the constructions of Smart Grid. In 2011, we accelerated the construction of a strong and smart power grid. We developed a world-leading Smart System Operation Technical Support System, and successfully put into operation several smart grid demonstration projects, such as HVDC flexible System, Tianjin Ecocity project and 750KV Yan ‘An Smart Grid Substation. 51.62 million Smart meters were installed all over the countries and Charge Stations for electric mobiles were constructed. With these achievements, SGCC plays a leading role in the World’s Smart Grid Development and we are willing to have exchange and cooperation with NGCP in this field. We would also like to help with the development of smart grid in the Philippines with the sharing of the R&D results.

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Despite aftershocks, heavy rains, and damaged bridges and roads, the National Grid Corporation of the Philippines (NGCP) pursued its restoration efforts in Negros island which was affected by an earthquake. By resorting to helicopters, motorcycles, and manual hauling of tower materials by linemen in areas inaccessible to line trucks, NGCP was able to restore power transmission service in the Negros sub-grid of the Visayas at 1:56PM on February 11, 2012. A helicopter hauled lightweight steel tower segments to be used as replacement of the affected structures along the Amlan-Bindoy-Guihulngan 69kV transmission line. NGCP, a privately owned company, will continue to go beyond limits to ensure the fast delivery of safe and reliable electricity to its customers. The company remains committed to fast-track similar restoration efforts during emergencies and improve services to power consumers. (NGCP News Release, 2012-02-22)

NGCP restores power transmission ser

A helicopter hauled Emergency Restoration System (ERS) materials to assist in power restoration.

We believe that this is vital in achieving our This latest installment of TransMissions banners MESSAGE FROM vision to become the best transmission network in one of the most important aspects of our everyday THE PRESIDENT Southeast Asia. operations that can have a significant impact on our ability to transmit power from generating plants to At the forefront of this vision is our Chairman of the Board who is under this month’s Spotlight. communities, business centers, and industrial areas With a long career as one of the world’s leaders in nationwide. the power transmission business, Mr. Du Zhigang’s Safety around power transmission facilities and valuable experience with the State Grid Corporation in the workplace makes the task of moving power of China (SGCC) enables us to bring the best to our end-users as seamless as possible. But practices and latest trends in grid management to neglecting even a simple safety precaution – such NGCP’s operations. as starting grassfires near transmission towers – This issue also features our conversation can cause not only outages, but can also potentially with Rep. Henedina Abad, who chairs the House result in loss of lives or damage to properties. Committee on Energy and co-chairs the Joint This is why NGCP has made it its commitment to Congressional Power Commission. Rep. Abad ensure that stringent international safety standards shares her personal views on power sector reforms are met in our operations. And we are happy to note HENRY T. SY, JR. and JCPC’s priorities in addressing concerns on that with all the effort that we’re putting into this EPIRA’s implementation. aspect of our operations, NGCP has been awarded We hope you find these stories interesting. As always, we an IMS certification – which recognizes the effective processes we have put in place to ensure safety of our personnel in the welcome your comments and suggestions. Just send them to course of doing their work and of our host communities living near corpcomm@ngcp.ph. Always stay safe! transmission facilities.
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efforts, and monitor the operational status of all affected transmission lines and substations in case of disasters. Other activities that complement these preparations are intensive trainings of emergency response teams on first aid and basic rescue and evacuation procedures, and regular drills for typhoon, earthquake, and fire emergencies. To date, NGCP has signed a Memorandum of Agreement with the Bureau of Fire Protection to ensure optimum security and fire protection for the nationwide network of lines, towers, substations, and other transmission facilities. Being proactive in its safety precautions and preparations allows NGCP to meet stringent international safety requirements. In fact, NGCP was awarded an IMS Certification for ensuring safety in the workplace. “(The IMS Certification) is definitely a big advantage since we now have a structured system that pushes us to continually improve by documenting and tracking incidents to ensure that appropriate preventive/corrective actions are timely instituted,” says Mr. Villaroman.

Active employees But how can an organization as big as NGCP institutionalize safety in its everyday operations? Mr. Villaroman points out that a crucial part of ensuring safety in the workplace actually rests on the employees – especially those in the front lines. “The key element in ensuring safety is the active role of the managers, supervisors, and foremen involved in the implementation of hazardous and critical activities where our personnel are exposed to potential safety hazards or possible harm. Our safety engineers also contribute to the identification of safety hazards in the workplace and are empowered to stop work when an activity, if allowed to continue, could lead to an accident,” says Mr. Villaroman. “In terms of ensuring safety in communities where transmission facilities are located, responsible groups are tasked to conduct regular information dissemination on the safety hazards posed by high-voltage transmission lines. These information campaigns are done through various forms of media and by

interfacing with the affected barangays.” Areas of improvement While the company has achieved much to ensure the safety of its employees and host communities, NGCP’s safety protocols can still be further improved. “Based on the recorded incidents, areas of improvement identified are in the aspect of vehicular safety and safety of personnel in carrying out maintenance tasks,” says Mr. Villaroman. “More controls are needed to address vehicular safety on ensuring vehicle roadworthiness and enhancement on the driver’s skills/attitude. Maintenance activities that are hazardous in nature should focus, among others, on the planning, procedural requirements, and availability of appropriate personnel protective equipment (PPE).” Mr. Villaroman insists that safety – in whatever profession or endeavor – should remain a top priority. And with accidents in the workplace, these should serve as a reminder that observing even the simplest safety measures can pay off big dividends and can even save lives.

NATIONAL GRID CORPORATION OF THE PHILIPPINES

rvice in earthquake-hit Negros Oriental
Linemen manually installed ERS materials to replace the damaged structures. To facilitate faster restoration time, the line crews continued with the restoration activities despite the aftershocks and rainy weather.

8 INDUSTRY NEWS
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ERC directs DUs to complete TOU meter installation for open access customers The Energy Regulatory Commission (ERC) directed distribution utilities in Luzon and Visayas to complete the installation of the Time-of-Use (TOU) meters for qualified customers in the initial implementation phase of the open access. In a resolution posted on its website on February 9, ERC gave DUs 30 days to complete the installation of the TOU meters – a requirement under the Distribution Services and Open Access Rules. ERC noted that the meters must be capable of measuring energy use and demand in a fashion consistent with WESM energy settlement intervals and distribution and transmission demand charge intervals. ERC Chairperson and CEO Zenaida G. Cruz-Ducut said the resolution is part of efforts to ensure the smooth implementation of open access, as well as the protection of consumers under the new regulatory regime. “The ERC assures electricity consumers of its vigilance in monitoring developments in the emerging competitive retail electricity market of the country. It will also ensure that DUs will maintain a policy of non-discriminatory service to its customers. It will continue without fail to look after the well-being of electricity consumers,” Ducut said. Aside from the installation of TOU meters, the resolution also directed DUs to provide contestable customers, upon request, with load profile data (LPD) covering a 12-month period at no cost to the customers. This is in response to complaints by some contestable customers on the intent of some DUs to charge a fee for the provision of LPD which provides historical power consumption by a customer, needed in choosing a supplier and negotiating for the most advantageous electricity supply deal. ERC explained that the LPD should be provided for free since this data will eventually be made available to customers without charge once the Central Registration Body (CRB) is in place. (Source: Manila Times, 2012-02-16) VECO switches on new Cebu power substation The Visayan Electric Company (VECO) energized a new power substation in Talisay City as part of its efforts to address the rising power requirement in the southern part of Metro Cebu. In particular, the 33-MVA Talisay substation – which is estimated to cost P50 million – will accommodate the increasing demand from Pardo up to the town of San Fernando and ease overloading problems in adjacent substations, Pardo and Naga. With this latest development, substations servicing these areas only need to be run at minimum capacity to address the power demand. Val Saludes, VECO’s assistant vice president for engineering, said the substation will be able to accommodate the expected increase in power demand in the area, once SM and Filinvest start operations at the South Road Properties next year. financial benefit to the project’s host communities mandated under Energy Regulation (ER) 1-94. “The issuance of the COE and the execution of the ER 1-94 are positive indicators that the permitting process of the Maibarara project is progressing as scheduled towards its targeted commercial operation date in October 2013,” PetroEnergy stated in the disclosure. On the other hand, PetroEnergy’s subsidiary PetroGreen Energy Corp. has been issued a certificate of non-overlap (CNO) by the National Commission on Indigenous Peoples for its proposed 40-MW to 50-MW wind farm in Aklan. The CNO confirms that the project does not encroach on any existing claims of ancestral domain by indigenous groups in the island, the company said in the disclosure. “The CNO is among the material requirements for a power project’s declaration of commerciality,” it added. PetroGreen’s proposed wind farm is currently in its third year of feasibility studies, but the final investment decision on the project remains hinged on the Energy Regulatory Commission’s approval of the feed-in-tariff for renewable energy projects, which would guarantee investors’ returns for a set period. (Source: Manila Times, 2012-02-21) DOE to bid out 50 hydro sites for exploration, development The Department of Energy (DOE) said it is bidding out between 40 to 50 new and untapped potential run-of-river hydro sites in Luzon and Visayas for exploration and development. DOE Undersecretary Jose M. Layug, Jr. said these sites have been the subject of a two-year study conducted by the Japan

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“This latest investment aims to improve the actual demand in southern Cebu from Talisay City to San Fernando, which is at 60 megawatts (MW),” Saludes said. Saludes added that power interruptions caused by load transfers will be eliminated within the next six years, as he hinted on a construction of a new substation at the South Road Properties in the next two to three years. For his part, VECO’s chief operating officer and executive vice president Jaime Jose Aboitiz said the company is now awaiting approval from the Energy Regulatory Commission for the addition of two substations slated for this year. “We need to be a step ahead and put the existing capacity before it’s needed,” Aboitiz said. VECO’s peak demand is estimated to reach 400 MW, especially during the summer months. (Source: Manila Bulletin, 2012-02-18) PetroEnergy gets DoE endorsement for 20-MW Batangas geothermal plant project PetroEnergy Resources Corp. said it has obtained the Department of Energy’s (DOE) endorsement for its planned 20-megawatt (MW) geothermal power plant construction project in Batangas. In a disclosure to the Philippine Stock Exchange, PetroEnergy said its subsidiary undertaking the power project, Maibarara Geothermal Inc. (MGI), has received a certificate of endorsement (COE) from the DOE. PetroEnergy and the DOE also signed a memorandum of agreement on the establishment of the one-centavo per kilowatt-hour

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NATIONAL GRID CORPORATION OF THE PHILIPPINES
International Cooperation Agency, which aimed to establish the hydro power generation potential of these areas. “There has been a study on these sites, and what we plan to do is by the third quarter this year, we will bid them out for purposes of awarding service contracts,” Layug said in a press briefing. He, however, noted that investors would have to validate the technical viabilities of these proposed projects. Layug said the bidding was preferred over the “first come, first served” scheme in granting renewable energy service contracts to ensure a more level playing field for investors. “We want more transparency and fairer set of rules. Again, this is not to say that we were not fair in the past. I think the public tender model will be better… So now, we expect that a bidding model will take out those complaints,” Layug said. Layug, however, said that those with pending applications for hydro service contracts will still be served and undergo the normal approval process. There are 149 pending applications for hydro service contracts, which can potentially generate 2,466.15 megawatts of power. (Source: Philippine Daily Inquirer, 2012-02-22) services in Mindoro and Palawan within the year. Napocor president Froilan Tampinco said they are currently in the process of preparing the terms of reference for the privatization of the company’s operations in these two provinces. He added that Napocor is awaiting the release of a circular from the Department of Energy (DOE) that will allow the company to conduct a competitive bidding process for its power generation services in the Small Power Utilities Group (SPUG) areas. “With the entry of the private entities, we hope to bring about a net reduction in the existing subsidies,” Tampinco said, adding that bidding for these power services will likely be held before July this year. Tampinco said Mindoro and Palawan are two of 14 SPUG areas that have already been identified for privatization. Napocor currently operates a total of 288 power plants in farflung areas, islands and other isolated locations not connected to the country’s transmission grid where major generating facilities’ output passes. Napocor’s operation in SPUG areas is subsidized by regular consumers through the Universal Charge for Missionary Electrification component of electricity bills which amounts to P0.11 per kilowatt-hour primarily because of high fuel costs and limited markets in these far-flung areas compared to locations connected to the power grid. (Source: Manila Times, 2012-02-22)

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Napocor announces plans to privatize assets in Mindoro, Palawan The National Power Corporation (Napocor) announced plans to privatize its power generation facilities and

DOE calls on distribution utilities and electric coops to ensure adequacy of contracted power supply in Mindanao
(Taguig City) The Department of Energy (DOE) would like to clarify, that contrary to reports, there is no power shortage in the Visayas. With the recent commercial operations of new coal-fired power plants in the region having a total capacity of 610 MW, power supply remains stable with an available capacity of 1,757 MW, a yearto-date peak demand of 1,375 MW and a reserve power supply of around 380 MW. The Mindanao grid, meanwhile, has been experiencing frequent red alert notices from National Grid Corporation of the Philippines (NGCP) which led to actual power curtailments in some parts of the grid. Projected peak demand in the region is at 1,300 MW while available capacity for Mindanao is only at 1,110 MW (excluding the 200 MW from the power barge of Therma Marine, Inc.). The demand does not include the required reserve margin to maintain the integrity of the grid as mandated by the Grid Code which is currently pegged at 250 MW. The DOE also stresses that the hydropower plants in Mindanao are already running in their optimized available capacity. “However, considering the future lower rainfall forecast in Mindanao, we cannot rely solely on hydropower plants. Non-hydro baseload is immediately needed and this will only happen if everyone cooperates,” Energy Secretary Jose Rene D. Almendras explains. Since 2010, the DOE has been warning that Mindanao needs additional baseload generating capacity which is why the agency is calling on private investors to attract more investment in the said region. Unfortunately, there are problems in securing permits from local government units, thus resulting to delay in projects. The DOE reiterates that as long as there are no new baseload plants, problems in capacity and shortage will persist. From the DOE’s assessment, adding up to the current situation in Mindanao is the observed non-compliance of some electric cooperatives to nomination, dispatch and curtailment protocols. There are distribution utilities and electric cooperatives that do not contract enough power supply for their actual needs and have thus been overdrawing power, causing problems in grid management. DOE already instructed NGCP to make the necessary technical upgrades so the distribution system will shift to a mandatory curtailment from voluntary curtailment. This will enable the NGCP to disconnect those distribution firms, electric cooperatives, and other bulk consumers of electricity if they withdraw power beyond what is contracted. The DOE also notes that there are available generation capacities that are not being utilized because they are not contracted, or when contracted, are not being dispatched. Power barges that can be moved to Mindanao are being offered by the private sector to provide temporary relief but will not be moved unless it is appropriately contracted. “We cannot blame their hesitation because there is existing generation in Mindanao that are not being contracted,” Secretary Almendras explains. The DOE notes that the region needs a long term solution. “Users must contract their required generation to ensure that new generation is put in place,” Secretary Almendras stresses. (DOE News Release, 2012-03-07)

eaSy Way tO SaVe eLeCtriCity
Are your light bulbs dusty? A thick coat of dust on a light bulb can cut its illumination by half. So make it a habit to keep lighting fixtures dust-free. Better yet, use energy-efficient lights. A fluorescent bulb uses 75% less energy than a regular light bulb. It can also last up to 4 years. (Source: http://www.kvarnews.com)

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CUSTOMER BULLETIN
Customer Bulletin 2012-05: RATES FOR JANUARY 2012 BILLING PERIOD (02 February 2012) The effective rates for the billing month of January 2012 (covering December 26, 2011 to January 25, 2012) are as follows: • Power Delivery Service (PDS) Rates, computed monthly based on the provisionally approved Maximum Allowable Revenue for 2012 of PhP40,350.78 million and the Performance Incentive Scheme of PhP503.12 million, are as follows: Power Deliver Service Rates Luzon Visayas Mindanao • • • Firm Rate (P/kW-month) 309.6163 313.4060 292.6936 Non-firm Rate (P/kW per day) 10.1792 10.3038 9.6228

see what can be done through executive action. And then you start formulating what should be amendments that can be taken in after this term. Has TransCo’s privatization through a concession mode helped in improving the power sector? I would think yes. This privatization helped in a sense na na-deliver. Kasi ang gobyerno hindi talaga sya pwede mamahala, magpatakbo ng isang negosyo. Lalo na siguro kung public utility. At best, kailangan may partnership. Bakit? Iba ang dynamics ng gobyerno, iba ang dynamics ng private sector. Kung tatanungin mo ako, I guess if you want to unburden government, then awarding of concession agreement would be your best bet. Pero kailangan magaling yung regulatory environment mo at regulatory institutions to ensure na yung public sector element, lalo na sa public utility ,hindi nawawala. Kaya pag tatanungin mo ako, mabuti ang privatization, pero malaki pa rin ang papel ng gobyerno. What are the JCPC’s plans for regulating the pricing, particularly the PBR (Performance-Based Rate)? We need to have a really concentrated, serious deliberation in this pricing methodology. I was a member of JCPC in 2004, discussing PBR. When you talk about PBR, okay naman sya kasi it is based on an incentive system rather than a fixed cost plus a markup. But there is a study done by the National Engineering Center of the University of the Philippines that shows that there are certain things we need to improve in our PBR methodology. Specifically, what improvements should be done? Can those be done through executive action or do you need legislation? Kung seryoso talaga yun, then we might need legislative action. Pero yung legislative action kasi matagal. So kung ano ang puwede ma-resolve through executive action, o ma-correct through executive action ‘di gawin mo na. That’s why we need to identify those (improvements) kahit na yung sinasabi nila na pricing methodology for electricity being distributed by electric cooperatives, we also need to take a look at it. In the end, the decision will always rest on the Energy Regulatory Commission (ERC) because it is the regulatory body. These are the things that we think should be corrected, based on information and based on our analysis.

The provisionally approved rates for System Operations (SO) Charge and Metering Services Provider (MSP) Charges follow the ERC Order for MAR2012. Connection Charges and Residual Sub-transmission Charges (CC & RSTC) shall be based on the ERC-approved CY 2009 CC & RSTC level. Ancillary Service Charges, computed based on the total cost of AS provision and the total billing determinant of customers who benefited from the service, are as follows: AS Cost (in PhP) Firm Rate (P/kW-month) Non-firm Rate (P/kW per day) 1.1530 3.0352 1.3302 0.0033 0.2998 0.8098 0.5395 0.5458 0.8647 4.4259

Ancillary Service Type per Customer Segment Luzon Regulating Reserve Contingency Reserve Dispatchable Reserve Black Start Capacity Visayas Regulating Reserve Contingency Reserve Leyte-Samar-Bohol Cebu-Negros-Panay Dispatchable Reserve Mindanao Regulating Reserve Contingency Reserve Dispatchable Reserve

271,977,721.67 715,888,508.95 313,763,312.67 768,793.54 31,071,806.09 2,625,594.23 28,446,211.86 23,677,273.36 24,986,434.20 39,580,514.32 202,622,236.12

35.07 92.32 40.46 0.10 9.12 24.63 16.41 16.60 26.30 134.62

Customer Bulletin 2012-06: RATES FOR FEBRUARY 2012 BILLING PERIOD (05 March 2012) The effective rates for the billing month of February 2012 (covering January 26 to February 25, 2012) are as follows: • Power Delivery Service (PDS) Rates, computed monthly based on the provisionally approved Maximum Allowable Revenue for 2012 of PhP40,350.78 million and the Performance Incentive Scheme of PhP503.12 million, are as follows: Power Deliver Service Rates Luzon Visayas Mindanao Firm Rate (P/kW-month) 305.3155 318.4994 296.4310 Non-firm Rate (P/kW per day) 10.0378 10.4712 9.7457
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NATIONAL GRID CORPORATION OF THE PHILIPPINES

NGCP CORNER
NGCP donates computers to school in host community

Vista Alegre Elementary School students show their appreciation of NGCP’s assistance. < from page 10, Customer Bulletin

NGCP officials hand over the computers in the presence of Brgy. Vista Alegre school officials, teachers, and local officials.

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The provisionally approved rates for System Operations (SO) Charge and Metering Services Provider (MSP) Charges follow the ERC Order for MAR2012. Connection Charges and Residual Sub-transmission Charges (CC & RSTC) shall be based on the ERC-approved CY 2009 CC & RSTC level. Ancillary Service Charges, computed based on the total cost of AS provision and the total billing determinant of customers who benefited from the service, are as follows: AS Cost (in PhP) 202,974,370.51 564,591,912.66 332,143,245.47 771,966.00 22,099,576.01 30,563,110.12 2,254,811.33 28,308,298.79 20,462,977.60 19,122,830.10 38,990,368.97 118,019,053.80 8.96 24.58 14.58 12.91 26.32 79.65 0.2946 0.8081 0.4793 0.4244 0.8653 2.6186 Firm Rate (P/kW-month) 23.81 66.22 38.96 0.09 2.59 Non-firm Rate (P/kW per day) 0.7828 2.1771 1.2809 0.0030 0.0852 -

Ancillary Service Type per Customer Segment Luzon Regulating Reserve Contingency Reserve Dispatchable Reserve Black Start Capacity Reactive Power Support Visayas Regulating Reserve Contingency Reserve Leyte-Samar-Bohol Cebu-Negros-Panay Dispatchable Reserve Mindanao Regulating Reserve Contingency Reserve Dispatchable Reserve

NOTE: Full text of the customer bulletins may be downloaded from www.ngcp.ph or requested from NGCP’s Revenue and Regulatory Affairs Department.

The National Grid Corporation of the Philippines (NGCP) recently donated used personal computers to boost a newlyestablished computer learning facility at a school located in one of the company’s host communities in Bacolod City. NGCP’s Corporate Affairs Department Head Nelson Cabangon led the turnover of the computers to the Vista Alegre Elementary School last February 3, underlining the company’s role as a development partner to its host communities. Barangay Vista Alegre, where the school is located, is host to the BacolodCadiz 238kV and Bacolod-E.B. Magalona 138 kV lines for the Negros-Panay Submarine Cable. “We thank the Vista Alegre community for giving NGCP the unique opportunity to share in the educational development of its students. We share the teachers’ and parents’ belief that the new learning facility will help the school to go beyond the traditional approaches to education, especially amid rapid changes ushered in by information technology,” Mr. Cabangon said. Those who attended the turnover event include NGCP District Head for the Negros Area Zosimo Briones, Vista Alegre elementary School principal Abilmehola A. Edrada, teachers, parents, and students.

ERRATA (January 2012 Issue) Page 2, “Customer in Focus: La Union Electric Cooperative, Inc. (LUELCO)”: San Jacinto and San Fabian in Pangasinan are partly served by LUELCO and Dagupan Electric Corporation (DECORP). LUELCO serves nine (9) barangays in San Fabian and three (3) barangays in San Jacinto. San Fernando City, Bauang, and San Juan in La Union, on the other hand, are under the franchise area of La Union Electric Company, Inc. (LUECO).